BOC Aviation IPO Backed by China Investment Corp, Boeing

   By Alec Macfarlane 
 

​HONG KONG--​Aircraft lessor BOC Aviation Ltd. has launched its initial public offering with cornerstone backing from investors that include China Investment Corp. and Boeing Co. (BA).

The Singapore-based company, which is majority controlled by Bank of China Ltd. (3988.HK), kicked off its IPO roadshow Monday and has attracted US$583 million from 11 cornerstone investors, according to a term sheet seen by The Wall Street Journal.

The biggest pledge is from Chinese sovereign-wealth fund CIC, which has committed US$100 million to the offering.

Other investors include U.S. plane-maker Boeing, Chinese private-equity firm Hony Capital Ltd., China's Fosun Group, Fullerton Funds Management -- a subsidiary of Singapore state investment firm Temasek Holdings -- and Oman Investment Fund, the Sultanate of Oman's sovereign wealth fund.

BOC said in a stock exchange announcement on May 12 it had set a price of HK$42.00 (US$5.4) a share for the offering, which will raise $1.1 billion. Proceeds from the IPO will be partly used to fund the purchase of more aircraft, according to a company spokesman.

BOC International Holdings and Goldman Sachs Group are handling the offering.

BOC Aviation claims to be the biggest aircraft leasing company in Asia, with $12.5 billion in assets, 270 aircraft and 62 airline customers in 30 countries, including Cathay Pacific Airways and Qantas Airways.

It also claims to have one of the youngest fleets in the sector with an average age of 3.3 years, including models such as the Airbus Group's A320neo.

Bankers regard BOC as one of the better-quality IPOs in Hong Kong this year, buoyed by Asia's growing aviation sector. Passenger demand is expected to nearly triple by 2035, according to Airbus. The company made US$343m in net profit in 2015, an 11% increase from 2014.

Bank of China will retain a controlling stake in the company following the IPO.

China Development Bank Leasing, BOC aviation's rival, is also planning an IPO in Hong Kong expected to raise roughly US$1 billion, The Wall Street Journal previously reported.

Write to Alec Macfarlane at [e-mail]

(END) Dow Jones Newswires

May 16, 2016 01:13 ET (05:13 GMT)

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